LONDON -- Credit rating agency Moody's Investors Service on Wednesday upgraded the debt ratings of Honda Motor Co. Ltd. and its supported subsidiaries to A1 from A2, citing strength in the company's core automotive markets.
The rating outlook is stable, Moody's said.
The upgrade was based on Honda's strengthening position in its core automotive markets as well as the success of the expansion in its model line-up, to include light trucks in addition to cars and motorcycles, the rating agency said.
"This development has resulted in a higher level of diversification in its sources of profit generation. The rating upgrade is also based on substantial improvements in Honda's cash flow and liquidity through its implementation of a financially prudent strategy," Moody's said in a statement.
"These developments will, in turn, allow the company to protect itself from potential downturns in the automotive markets."